Doubts cast on region’s ability to collect taxes from oil sector
An oil rig at Ngamia 1 where Tullow Oil Company is exploring oil, 25km from Lokichar in Turkana County. Anxiety over concerns that local people may not be included in revenue sharing and employment has led to some unrest and keen interest in business opportunities.
British oil explorer Tullow Plc estimates that there are about one billion barrels of oil in the Lokichar basin where the company is licensed to conduct exploration.
According to Energy cabinet secretary Davis Chirchir, the new model will see the government claim revenue based on the ratio of cumulative revenues and expenditures.
Analysts have questioned East African governments’ ability to evaluate and collect tax revenue from companies exploring and producing oil and gas.
At a conference on the oil and gas boom in East Africa held at the Oxfam America and Brookings Institution last week, the experts said the region lacks institutional ability to administer such taxes.
